Monday, June 14, 2010

Hot, Flat, and Crowded

There are two main reasons for this; one is an opinion of him I've held for a while, and one that just manifested itself as I finished his latest book, Hot, Flat, and Crowded.

The first reason is that he's a terrible writer. No, wait, I take that back. He's actually a very skilled writer. As a kind-of journalist--and not a scholar--he is able to take imperatively complex issues (mostly about foreign affairs) and put them in perspective. He's not one of those writers who is able to "boil everything down" to a few smart quips and bumper sticker slogans; he's actually quite verbose, and meanders just a little bit too much (but for the good, I feel) to be considered contrite. But he is able to score key interviews with second-tier figureheads in governments and corporations. Talking to the leader of a Middle Eastern nation will do little good; they've perfected the sound bite as much as the West has. But he'll talk to the fourth-in-command, and he gets some truly unique truths that many other journalists miss because they're looking for the big score.

When I say he's a bad writer, I mean that he comes up with the most ridiculous metaphors you'll ever come across, he cites weird web sites and mimeographed newsletters from fringe groups as if they were scholarly literature, and tries to coin so many phrases you think his main goal is to pad out what his obituary will say when he dies ("He coined twenty well-known terms in his lifetime, such as...") The result really seems to be a really, really, really good term paper by a college senior. It's not that it's not professional, but he bucks so many standard writing trends it's hard to get used to. Thankfully, this doesn't invalidate any of his points, but it is remarkably distracting.

The second most frustrating thing is he has the ability to be simultaneously spot-on correct and irreversibly mistaken at the same time.

The content of Hot, Flat, and Crowded is that the environment has to be the most important issue that America and the world tackles, and it has to be done ten years ago. I think that Friedman is wrong on a lot--I mean a lot--of the little points, but the overall message that he has is quite correct.

The first thing to note is that he and I agree on one thing, as I noted in a previous post--those "101 Little Things To Do To Save The Earth" are pretty much worthless. I mean, yeah, they work, but those things aren't going to save the earth. Buying recycled toilet paper and saving bath water for the plants isn't going to do anything. At all. At the very least, things like that are going to be a substitute for real change--we need people to be doing the 5 difficult things to save the earth rather than the 101 little things. The thing that is going to save the earth are long-term solutions that pretty much revolve around one thing: energy.

And that's the second thing that we agree on: there isn't really any comprehensive program, private or public, that helps nurture new energy sources. As a warmed-over libertarian, I'd rather see little to no government regulation, but I'm not naive enough to think that it's going to develop naturally in the marketplace until it's too late. And I think this is where Friedman and I differ: ten or fifteen years ago, it made no sense to force companies to create, say, electric cars, or build wind turbines, because the technology really hadn't developed to the point that it was feasible beyond massive government subsidies. As technology has progressed, however, that's no longer the case, and that's why I'd like some conservatives to move forward when it comes to the environment--they still think that Al Gore is driving around in a tiny Smart Car that would have to cost three million dollars if it wasn't for the government pouring money into a rathole. There is a business case now for green technology--there are companies in Europe and China that are managing to do so right now--that would require somewhat painful but manageable government policies to make a reality.

Where Friedman goes wrong, however, is in political reality. And I think he recognizes this, but his solution isn't to create a politically palatable solution, but to throw up his hands and decide that he would like to be China for a day--that is, a dictatorship that could cut through all of the bureaucracy and special interest groups.

To be fair, I don't know what a political palatable solution is, either. For example, Friedman--and, dare I say, an increasing number of policymakers--advocate a carbon tax. This would 1) discourage the use of carbon, and 2) ensure that the price of energy doesn't fall below a certain point. That last one may seem an odd thing to note, but it's the one thing that works; businesses are more likely to invest in green energy projects if they're certain that the price of energy will be worth it. As it stands right now, the price of oil (and coal and natural gas) fluctuates so much that it's possible all the time, effort, and energy in a green project won't become profitable for a decade or more because of a glut. Business hate that sort of uncertainty, so they may throw a small percentage of R&D towards it, but they're not going to go large scale; unfortunately, large scale is exactly what is necessary to get to where we need to be. If the business sector knows it will be profitable, that changes. Of course, the end result is that you and I pay more for gasoline and heating our house, so it's going to be a hard--and nearly impossible--sell, and I'm not sure if it's a thing worth selling.

There are a few other possible ideas out there, mostly things like cap and trade, tax incentives, overhauling our power grid, and direct government spending, that can be useful but have to be immune from political posturing, something that will be difficult to achieve. But I more or less agree with it. This isn't the 80's, when doing such things was prohibitively expensive and the government would have to run the show because no business could possibly be profitable. There's enough technology and competition from other nations that a comprehensive environmental tax incentive and spending structure would be useful to transform how we use energy.

Granted, my libertarian heart cries out in shame that I would advocate this. And I do this with hesitation. But I also know that companies have, for decades, imposed externality costs on society (via pollution, strip mining, land grabs, etc.) and have never really had to pay them. To me, this is a valid free market excuse for intervention. And don't get me wrong--we're still going to be burning coal, oil, and gas for decades, which is probably the only way to sell this. Politically, you have to be smart by telling your constituents in West Virginia and Kentucky and Pennsylvania that their jobs are safe--for now--but you should prepare the next generation to be post-carbon.

The free market argument against government intervention in the environment is that, in the past, the true innovation occurs when pricing changes. Whale oil used to be just like our crude oil, with the overhunting of whales leading to a near energy crisis. But along came kerosene, and all of a sudden the demand for whale oil practically disappears overnight. The same things goes for this--when the market is ready, carbon energy will disappear. True change will come not when the government decrees it, but when the market decrees it. This is still true today, and I don't think we'll get there any other way. But I don't mind the government speeding the process up a little bit.

Where Friedman and I disagree the most is basically the first half of the book, which is basically the same science alarmism I've been hearing since the mid-70's. (Or would have, had I been living then.) I'm not a global warming denier by any means, but I'm also a skeptic. I think the earth is warming, I think it's a bad thing, and I think man has something to do with it--but I'm also not willing to say exactly how much our contribution to that warming is, and whether a massive-scale change in our behavior would have anything to do with it. I distrust scientists because it seems like any time there is some major breakthrough or announcement telling us that we need to change the nature of our lives right now, it turns out the data is flawed, the scientists are just flat wrong, or the issue was overblown to the point of absurdity. So I don't want to dismiss everything, but I also don't want to have a life-changing, comprehensive overhaul of our society based on the half-baked data of some attention-hungry scientists. (Hint: This has happened in the past, many times.)

Alas, Friedman makes some good points but more or less just repeats everything I've heard in the past, including: Yeah, some of this must be wrong, but what if it isn't? The drastic hypothetical is a bad start for any policy and I refuse to be held hostage to whimsical notions.

Friedman does go through a remarkably interesting (but otherwise useless) scenario of tomorrow's smart energy house, where people have "Smart Boxes" that regulate the energy consumption of the house. I think it's a great idea and it's at least conceivable--it's already been in use in trials--but I think the notion that somehow everyone in America will have this setup in the near future is absurd. It's certainly interesting but doesn't contribute much to his argument.

Friedman gets more interesting when discussing what other nations have done, and I learned a few things about what China and Europe are doing. I'm not certain any of it would work here, but I think that Americans do need to start innovating fairly quickly, or the next century will not belong to us. Even here, though, Friedman slips into alarmism: he laments that the United States only holds one of the top ten wind turbine companies in the world, which I was slightly distressed at. Then I looked at his chart. While true, the one company was General Electric, and they were at the top, and their market capitalization was higher than the other nine companies combined. Yawn. Still, right now, other nations are running laps around us for clean energy sources...and while it may not be profitable now in the US, the next century is going to be more about that than new sources of oil. The United States could easily be left behind, and this is a big industry; at the very least, we should be more prepared than we are.

So in the end, I think this is a terrible first half of a book and a remarkably sound second half of a book. I think Friedman is more or less naive when it comes to how policy and government works, although I think he knows it. As a writer, he has the luxury of declaring what needs to be done now without worrying too much about the details.

This is a book review so it really shouldn't have a Pledge, but this is one long-ass review, so, whatever.

The Pledge: It is the free market, not the government, that will decide when green energy sources will be viable. That doesn't mean that, due to the externalities existing power sources impose on society, the government doesn't have a role in speeding things up a bit. And the goal (at least in the short term) shouldn't be to punish carbon fuels (except, you know, BP), but to make sure that the right options come up with minimal interference.